A Salt Lake doughnut company with a familiar name has been purchased by a competitor with a not-so-familiar name even though the former had slightly lower annual sales than the latter.
Gary Gottfredson and John Stevens, co-owners of Donuts Inc., 2155 W. Alexander St., West Valley City, have purchased Salt Lake Donut, 2569 S. State, a familiar business name in Salt Lake City since 1946.The terms of the sale was not announced.
Gottfredson and Stevens, veterans of the baking industry in the area, said DI has $2.5 million in annual sales - Salt Lake Donut takes in a little less - but they expect that to increase to $10 million within two years. Since the sale was completed, the company has picked up three large accounts for sweet rolls.
Both men said purchase of Salt Lake Donut removed one of their major competitors from the market and will allow Donuts Inc. to be a dominant force in the doughnut business by continuing to expand its products in 16 states. The new owners plan to continue using the Salt Lake Donut name and location as a major part of their business.
Salt Lake Donut was founded by Doug Jones and Asael Rigby in 1946. In 1970 there was a major fire; Jones bought out his partner and rebuilt the operation. In 1979, Dunford Industries (now know as American Consolidated Industries) bought out Jones and also purchased Dunford Bakery, one of Salt Lake Donut's major competitors.
Doughnuts from Salt Lake Donut have been a staple dessert item for many years and especially popular have been the seconds sold in over-stuffed boxes for $3.50 from the retail counter in the front.
Stevens and Gottfredson incorporated Donuts Inc. in 1981. Before that, both worked for Metz. Stevens also was a plant manager for Dunford Bakery and Gottfredson was sales manager.
In its 10 years of operation, Donuts Inc. has shown substantial annual sales increases and expanded its product lines to include brownies, sweet rolls, cookies and other bakery items.
Last year, the two men purchased some equipment and expanded into the specialty bread business at the same West Valley City location. Running Rocky Mountain Bread is Ron Stevens, John's brother, who wants to open a deli in the front of the operation and sell sandwiches and soup to the expanding number of employees in the Decker Lake Industrial Park.
Because the Salt Lake Donut location is better suited to producing cake donuts (1 million per week), it will focus on that product while all yeast-raised bakery products will be made in West Valley City. The plants employ a combined 40 full-time and 10 part-time employees, who produce doughnuts 18 hours per day.